Rich-lister is a Working Class Man at heart

RICH-LISTER Jamie Pherous has spent almost $2.5 million beefing up his holdings in embattled Corporate Travel Management only days after splurging on a star-studded birthday bash featuring Jimmy Barnes and INXS.

The founder and managing director of the Brisbane travel empire under fire from short sellers VGI Partners bought 115,000 shares for $2.43 million, equating to about $21.13 per share. The increase was equal to half a per cent of his total holdings in the company.

The purchase follows a troubled two weeks for Mr Pherous and CTM that interrupted the 50-years-old's birthday celebrations at ultra-luxurious Qualia resort on Hamilton Island. Joining Mr Pherous in increasing holdings in CTM was fellow director Admiral Robert J Natter, who purchased 12,000 shares for $269,883 on November 2.

Despite the show of confidence from the boardroom, CTM shares slumped 8.4 per cent yesterday to $21.02 yesterday and are now down 24 per cent since VGI released a report on October 28 raising 20 "red flags" about its financial performance.

Yesterday's losses largely ate into the stock's 14.75 per cent gain on Thursday when CTM provided an update to the market purportedly signed off by big gun accounting firm EY. The update said VGI had a "fundamental misunderstanding" of its business model.

VGI has called on CTM to release EY's full report and confirm that the company's method of revenue recognition had been audited by the firm.

In the update, CTM says EY raised no concerns about the company's accounting methods covering goodwill, working capital and cash income. However, one section covering a change to the way the company recognises revenue in its books contained no commentary attributed to EY.

CTM said the change was immaterial.

An EY spokeswoman said yesterday that the firm would not comment on the terms of its engagement with CTM or the veracity of the information released by CTM.